India Launched Online Book Selling In Previous Year 2013

The high cost of attracting new customers on the Internet and the relative difficulty in retaining
them make customer loyalty an essential asset for many online vendors. In the non-Internet
marketplace, customer loyalty is primarily the product of superior service quality and the trust that
such service entails. This study examines whether the same applies with online vendors even though
their service is provided by a website interface notably lacking a human service provider.
As hypothesized, customer loyalty to a specific online vendor increased with perceived better
service quality both directly and through increased trust. However, the data suggest that the five
dimensions of service quality in SERVQUAL collapse to three with online service quality: (1) tangibles,
(2) a combined dimension of responsiveness, reliability, and assurance, and (3) empathy. The first
dimension is the most important one in increasing customer loyalty, and the second in increasing
customer trust. Implications are discussed.
Keywords: E-commerce, trust, risk, customer loyalty, SERVQUAL


The high cost of attracting new customers on the Internet and the relative difficulty in retaining
them make customer loyalty an essential asset for many online vendors. In the non-Internet
marketplace, customer loyalty is primarily the product of superior service quality and the trust that
such service entails. This study examines whether the same applies with online vendors even though
their service is provided by a website interface notably lacking a human service provider.
As hypothesized, customer loyalty to a specific online vendor increased with perceived better
service quality both directly and through increased trust. However, the data suggest that the five
dimensions of service quality in SERVQUAL collapse to three with online service quality: (1) tangibles,
(2) a combined dimension of responsiveness, reliability, and assurance, and (3) empathy. The first
dimension is the most important one in increasing customer loyalty, and the second in increasing
customer trust. Implications are discussed.
Keywords: E-commerce, trust, risk, customer loyalty, SERVQUAL

An alternative reason why customers return to an online vendor is based on utility: customers
will remain with a vendor because the cost of switching to another vendor is such that it is not worth
their while to switch [Chen and Hitt 2000; Reichheld and Schefter 2000]. Indeed, regarding ERP
consultants, the cost of changing to another vendor, independently of their trust in the vendor,
increases their loyalty to the vendor with whom they are used to working [Gefen and Govindarajulu
2001]. Although this cost-to-switch may not be the main reason why online customers are loyal
[Reichheld and Schefter 2000], it was included in the research model to allow for the evaluation of
the relative importance of customer trust and service quality on customer loyalty.
H4: Perceived switching costs to another online vendor will increase customer
loyalty.
Customer loyalty, in general, is also built up through good quality service: when customers get
high quality service, they are more likely to come back and to recommend the vendor to others
[Heskett et al. 1994; Reichheld and Sasser 1990; Reichheld and Schefter 2000; Zeithaml et al. 1996].
The same applies to online vendors [Reichheld and Schefter 2000]. In this study, service quality was
defined with an adapted SERVQUAL instrument because of its empirically validated effect on
customer loyalty across industry types [Zeithaml et al. 1996]. Arguably, the service dimensions
captured by SERVQUAL should also be important to online customers:

Tangibles: This dimension of SERVQUAL deals with appealing physical facilities and with

human service providers who are dressed neatly. Although a customer of an online vendor

cannot assess these, this dimension should apply to online vendors through the appearance of

the website. The website is a tangible aspect of the online service that is partially comparable

to the appearance of any storefront or service counter [Berman and Green 2000]. Moreover, a

neat and appealing website is a tangible value in its own right just as a neat, well-organized, and

indexed directory or catalog is. Conversely, a cluttered and disorganized website is not a sign

of good service, just as a cluttered and disorganized storefront, service counter, or catalog is not.

In the case of a book-selling vendor, such as Amazon.com, the appealing interface, ease-of-use

and understandability of the website interface, and the clarity of the purchase procedures are

tangible service benefits [Gefen and Straub 2000].

ï Reliability: This dimension deals with providing the service on time and as ordered. It is

perhaps among the most important aspects of service quality, in general, and is also a major

aspect of online service quality [Berman and Green 2000]. In the case of a book-selling vendor,

delivering the ordered products dependably and on time is an example of reliable service, just as

it is with a traditional bookstore. 

ï Responsiveness: This dimension deals with the human service providerís ability to respond to

the customers in an accurate, error-free, helpful, and prompt manner. It is doubtful if automated

systems today can provide the kind of responsive service that salespeople can, but there are

some responsiveness aspects that also relate to websites: providing prompt service, providing

helpful guidance when problems occur, and telling customers accurately when the ordered

services will be performed or the products delivered.

Assurance: Here too it is doubtful if an automated system can provide the knowledge and

courtesy of human assistants measured in this dimension. Nonetheless, courteous help-screens,

and appropriate error messages and guidance boxes, among other means, can help customers

in a manner comparable to guidance signs and instructions in a regular store. Conversely, as

in a regular store, the lack of such apparatus may be interpreted as an indication of disregard

toward the customers. In the case of a book-selling vendor such as Amazon.com, assurance that

the vendor is knowledgeable and courteous can be shown through the systemís ability to guide

the customer through the process, and to supply additional beneficial services, such as

recommending additional books dealing with the same topic. 

ï Empathy: Many online vendors, including the one examined in this study, attempt to create a

personalized service through customized contents, personal greetings, and individualized e-mail.

Needless to say, these do not create the same empathy as human service providers, but they do

personalize the interaction with the vendor and provide individualized service to some degree.

Accordingly, it is hypothesized that these service dimensions and their predictive validity apply

also to online vendors. Hypotheses H5.1-5.5 deal with the five dimensions of service quality in order:

tangibles, empathy, reliability, responsiveness, and assurance. 

H5.1ñ5.5: Service quality increases customer loyalty.